Episode 11: Budget Ratios

In this episode, we talk about budget ratios and how we use them to help guide our decisions.

Show Notes

Budget ratio general rules

• 25% housing cost (rent or mortgage, include taxes, insurance, etc)
• 25% transportation (car, bus, metro, include upkeep of car and insurance)
• 15% retirement
• 25% living expenses (food, going out, utilities etc)
• 10% savings/debt relief

Our budget ratio

• Our usual take home pay is $7700 a month
• Mortgage is $1700 or (22%)
• Transportation – Roughly 600 a month (~8%)
• Retirement is 15% as a percentage but in actuality, it is 6%
• Living expenses about $1400 a month or (18%)
• Childcare and child expenses about $1400 or (18%)
• Left over is about $1400 (18%) which goes to the solar panels, trips, and house (in theory 28% of our income is left over or about $2100)

Other types of budget ratios

• 50/30/20: 50% Fixed costs, 30% Flexible spending, 20% Financial goals